Mark Zandi, the Moody's prognosticator who's always getting it wrong
Here is a supposed disaster: the economy is growing, unemployment is plunging, manufacturing jobs are up, full-time jobs are up, wages are rising, corporate profits are soaring, corporate sales are up more than 8%, exports are up over 8%, and consumer and business confidence is high. What are Democrats to do, since an election is coming up? The answer is obvious. They need to get with the media to essentially hide the current economic data and predict doom and gloom in the near future to depress the public.
This is what seems to be the story now. These days, the media frequently go to the supposedly independent Mark Zandi in their commentator pools to support Democrat policies and to trash Republican policies. Zandi works for Moody's Investors Service.
This is quite a coincidence, because a major shareholder of Moody's is Warren Buffett. Zandi and Buffett have been consistent supporters of President Obama and Hillary Clinton for the past ten years, so Zandi is about as independent as the Justice Department and IRS under Obama. More important, he has a rather egregious history of being wrong.
His record as a prognosticator isn't good. In the Associated Press, Zandi predicts 700,000 job losses and a slow economy next year. Somehow, such an expert as Zandi don't seem to think that Canada, Mexico, Europe, and China will adjust their punitive tariffs and taxes to protect their economy. They seem to lack vision as they exhibit groupthink. Here's what goes out instead:
Moody's Analytics estimates that if the tariffs were imposed on autos and most Chinese imports and other countries retaliate as expected, annual U.S. growth would slow by 0.5 percentage point by mid-2019. It expects that 700,000 jobs would be lost.
In 2016, Zandi said Trump's policies would cost 4 million jobs as he was shilling for Hillary Clinton. Was he right? Hardly. Instead, we will have between four and five million new jobs in Trump's first two years. Zandi was only 8 to 9 million jobs off, and now we are supposed to believe his 2019 predictions?
An economic model of Trump's proposals, prepared by Moody's Analytics at the request of The Washington Post, suggests Trump is half-right about his plans. They would, in fact, sock it to China and Mexico. Both would fall into recession, the model suggests, if Trump levied his proposed tariffs and those countries retaliated with tariffs of their own.
Unfortunately, the United States would fall into recession, too. Up to 4 million American workers would lose their jobs. Another 3 million jobs would not be created that otherwise would have been, had the country not fallen into a trade-induced downturn.
Zandi in October of 2017 said the Republican tax plan wouldn't add significantly to economic growth. Here he was then:
In 2016, during the election campaign, Zandi said Hillary Clinton's plan would create millions of extra jobs and fast economic growth. Why the economy was so slow under President Obama and why it would all of a sudden speed up under Clinton seem to go unaddressed. How do higher taxes, more regulations, and transferring more power to the government stimulate economic growth?
Yet here is what Moody's was putting out back then:
Moody's Analytics estimates that if the Democratic presidential nominee's proposals are enacted, the economy would create 10.4 million jobs during her presidency, or 3.2 million more than expected under current law.
Here's another thing: Zandi was a vocal supporter of the stimulus package President Obama deployed during the financial crisis of 2009. Zandi supported Obama over GOP challenger Mitt Romney. He continually supported Obama's policies and we got the slowest economic recovery in seventy years. Zandi never worried about debt while pushing Obama's plans. He actually liked the Obama jobs plan.
Zandi hasn't just been wrong about his economic predictions. He was massively wrong.
Somehow, neither Moody's nor the other ratings agencies spotted the looming housing crisis and kept their high ratings.
In a 2010 hearing, Zandi and Buffett said they didn't spot the problems with junk mortgages. How possibly could they anticipate that negative amortizing loans, no-document loans, and more than 100% loan-to-value loans would cause problems? Naturally, they were caught by surprise.
The ratings agencies also missed the problems with Enron.
In 2015, Moody's said it blew its credit ratings on mortgages, because its model was wrong, starting in 2001.
Maybe these experts could exhibit some common sense instead of relying on computer models. Moody's, nearly seven years too late, admits miscalculation in subprime ratings
Moody's is finally admitting it made an error in calculating the ratings of hundreds of subprime, alt-a and other mortgage bonds that were issued in the run up to the financial crisis.
Moody's says it recently discovered the error even though it had to do with bonds that were rated as early as 2001.
Moody's, Standard & Poor's, and Fitch are significantly responsible for the economic collapse in 2008, businesses and banks failing, and millions of jobs lost. If they had not improperly rated junk debt for mortgages, high pension funds, mutual funds, Fannie, and Freddie, banks and others wouldn't have been able to buy those bonds. Their economic models were not off. They essentially sold their souls for cash, and greed got in the way of accuracy and common sense.
Why would anyone trust any of Zandi's predictions when he has been off so often, and why would anyone pretend he is independent?
It is clear that Democrats are doing everything to get their power back, and it is not "for the people." It is for themselves. They have amassed a tremendous amount of power over the years, and they cannot stand an interloper like Trump transferring the power, purse, and freedom back to the people as fast as he can.